French billionaire Francois Pinault’s holding company Artemis SA agreed to pay American International Group Inc.’s SunAmerica unit $62.5 million to settle a lawsuit over an investment in a California insurer.
AIG Retirement Services, as SunAmerica is now known, and Artemis yesterday filed a request for U.S. District Judge John Walter in Los Angeles to approve the settlement, The other defendants in the case, Credit Lyonnais SA and MAAF Assurances SA, already settled with AIG.
With the Artemis settlement, AIG’s total recovery from the lawsuit is $236.5 million.
“We’re very pleased to have resolved this matter amicably,” Mark Herr, a spokesman for New York-based AIG, said today in a phone interview. The case was scheduled for trial Oct. 18.
The AIG unit sued a group of French companies including Artemis in 2005, alleging that it was defrauded when it bought a 33 percent stake in New California Holdings Inc. because it didn’t know that the French owners, a group led by MAAF Assurances, were a front for Credit Lyonnais. At the time, the French bank couldn’t own an insurer under U.S. law.
New California was the restructured successor of Executive Life, which was taken over by the state of California after it had become insolvent and was later sold to the MAAF group. France, on behalf of Credit Lyonnais, paid $600 million to settle claims the bank misled regulators by not disclosing it was the true owner of Executive Life.
Artemis in 1992 agreed to buy part of Executive Life’s junk-bond portfolio from the French group as well as a controlling stake in the insurance business a few years later.
Pinault’s holding company, whose other investments include auction house Christie’s International and retailer and luxury-goods maker PPR SA, is still a defendant in a lawsuit by the California Insurance Commissioner over the company’s role in the Executive Life transactions.
Alan Salpeter, a lawyer representing Artemis, didn’t immediately return calls seeking comment on the AIG settlement.
The case is AIG Retirement Services v. Altus Finance, 05-1035, U.S. District Court, Central District of California (Los Angeles).